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| Volume No. 1 Issue No. 43 - Wednesday May 28, 2003 |
 Difficult Economic Times Ahead?
 Editorial Viewpoint
On his return from Washington where he held discussions on this year�s budget with the International Monetary Fund (IMF), Prime Minister Pierre Charles warned the country to expect further austerity measures as his government sought to reverse the negative economic trend on the island.
Dominica has been reeling from a deepening economic crisis as revenue from bananas, the main foreign exchange earner for the past thirty years continues to decline. Government has been confronted with a widening fiscal deficit as recurrent expenditure continues to outpace revenues. In the June 2002 budget, and as part of an IMF Stand-by financing arrangement, the government introduced a four percent stabilization levy.
The levy was imposed on the after tax income of persons in both the public and private sector as a means of raising the level of government revenue. A year after its imposition however, the levy was determined to be too small to significantly impact on the fiscal deficit.
After a week of talks in Washington, the Prime Minister informed the country that his government had no choice but to take drastic action to reduce the ever widening deficit. He revealed that new measures to be introduced in this year�s budget will include either a reduction in public servant salaries or a slashing of the public workforce.
After the announcement, president of the Public Service Union (PSU), Thomas Letang vowed that his union would resist government�s efforts to impose any further hardships on public servants. At the same time, opposition leader Edison James accused the government of abandoning the management of the country to the IMF.
The worsening economic crisis on the island has forced government to abandon completion of a series of projects including the building of a sports stadium at the Windsor Park. Prime Minister Charles was recently quoted as saying that he was prepared to pay the price of losing the next general election, but was determined to tackle head-on the emerging economic crisis with help from regional leaders and the international community.
Meanwhile, architect of the economic recovery program, Director of Finance and Planning Swinburne Lestrade has announced publicly that he will not be renewing his contract when it expires in July. The Prime Minister continues to express confidence that the new measures to be outlined in this year�s budget will serve as a basis for stabilizing the economy and restoring growth. The Prime Minister who is also finance minister is expected to present the budget before parliament on June 16, 2003.
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